Publication: Monitor Volume: 7 Issue: 6

Plans to increase Russian military spending stayed on track last month when the State Duma approved a defense spending bill for the year 2001 which will allocate just under 219 billion rubles (US$7.8 billion and 18.3 percent of Russia’s total state budget) to the Russian armed forces. The move was not unexpected, and will serve to raise Russian military spending by more than 40 percent over the 140 billion rubles allocated in 2000. Last fall the Russian government had been projecting defense spending at 206 billion rubles for 2001, but pressure from the military leadership as well as from many Russian lawmakers resulted in the higher figure approved last month. President Vladimir Putin, who had ascended to office with pledges to rebuild Russia’s military might, is believed to have backed the higher amount. In addition to the 219 billion rubles set out in the regular military budget, the armed forces are reportedly also slated to receive an additional 6.8 billion rubles from extra budgetary sources (Nezavisimoe voennoe obozrenie, December 2000; AFP, December 27, 2000; see the Monitor, October 18, 2000).

Exactly how state defense funding for 2001 is to be distributed within the armed forces is difficult to say with any precision, however, because of what critics complain is a recent sharp increase in secrecy related to the military spending figures. According to Sergei Yushenkov, a member of the Duma Defense Committee, the number of military items listed in the defense budget has been considerably reduced from last year, while the volume of information released to the public has likewise fallen. Aleksei Arbatov, deputy chairman of the Duma Defense Committee, complained similarly that it is impossible for lawmakers to divine the shape of this year’s military budget from the information the government has provided. He attributed the increased secrecy to the Russian executive branch’s broader reluctance “to make the military reforms a subject of public debate, and [to their] desire to keep decisionmaking restricted to a narrow circle” (Vedomosti, Vremya novostei, December 15, 2000). Discussion of far-reaching plans aimed at cutting and reshaping Russia’s armed forces have been confined largely to the Russian Security Council–an ostensibly advisory body subordinated directly to Vladimir Putin–with little input from lawmakers or the public.

On December 26, however, Russian First Deputy Prime Minister Ilya Klebanov, who oversees defense industrial matters within the government, did tell reporters that funding for defense procurement in 2001 will total more than 31.5 billion rubles–more than double the amount allocated for that purpose last year (AFP, December 27, 2000). As impressive as that might sound, observers nevertheless caution that the new procurement figures will do little to address either the army’s immediate hardware needs or to begin the process of reequipping what the Kremlin hopes will in the coming years be a leaner but more capable fighting force. Indeed, despite plans to reduce armed forces personnel by approximately 350,000 over the next several years, the funding allocation within the defense budget is expected to remain, for the foreseeable future, heavily weighted toward paying and generally maintaining Russian military personnel.

The degree to which the 2001 defense budget will satisfy military leaders will, moreover, depend not only on the promptness of the Russian government in meeting its fiscal responsibilities in this area, but also on the degree to which it follows up on an earlier commitment to pay off the Defense Ministry’s estimated 32.5 billion ruble debt (some sources have put the figure higher) to various private and government suppliers. Russian Prime Minister Mikhail Kasyanov recently signed off on a resolution which, roughly speaking, obligates the government to pay off 50 percent off these debts in cash and another 50 percent through the issuance of government securities. This may satisfy the Defense Ministry, but at least some Russian defense enterprise heads have apparently complained already to the Kremlin that the government pay-off policy could devastate the defense sector (AVN, January 5, 8).

Russian military personnel, meanwhile, could be left dissatisfied with another aspect of the government’s defense spending policies. To simplify the defense budget, the government apparently intends to phase out a package of benefits which have long been paid to Russian soldiers (at least, when the government had the funding to pay them). These benefits, which include allowances and privileges for such things as housing and transportation, have in the past helped to offset low military pay rates. There is said to be considerable concern within the ranks now that government plans to compensate for this loss of benefits by raising salaries will not be enough, and could further lower already deplorable living conditions for many Russian soldiers. In addition, as part of the same plan soldiers stand to lose previous exemptions from Russian income taxes. The government apparently hopes to mitigate the effects of these changes by phasing them in gradually, but any missteps in the process could further alienate a military community already embittered by plunging pay and prestige (Izvestia, November 29, 2000; Krasnaya zvezda, December 7, 2000; Novye izvestia, December 16, 2000).